Memorandum for The Honourable Frank McKenna

Dear Premier McKenna,

We at the Business Council on National Issues (BCNI) welcome this opportunity to offer some thoughts on the future of our country, as we enter what we believe is a critically important phase in our collective development as Canadians. We offer these thoughts to you, as the incoming Chairman of the Council of Premiers, in the hope that you will share them with your fellow First Ministers when you meet a few weeks from now in St. Andrews, New Brunswick.

THE DECISIVE ROLE THAT PREMIERS CAN PLAY

Over the past twelve months, the BCNI has encouraged pro-Confederation Premiers to draw on your collective strength and enormous pool of goodwill towards Canada and all of our citizens, to launch a series of initiatives aimed at bolstering the federation. This appeal to collective action was not meant in any way to take away from the central role of the Prime Minister, who speaks for all Canadians in matters touching national unity, but rather to complement the Prime Minister’s and his government’s already extensive efforts.

At last year’s meeting of the Council of Premiers in Jasper hosted by Premier Klein, you and your colleagues clearly demonstrated a commitment to helping resolve national issues in partnership with the Government of Canada. We were impressed then with your vision of a new, dynamic and constructive federal-provincial partnership. We remain convinced today of the great benefits that this approach can bring to the governance of Canada.

WHY BUSINESS LEADERS ARE SPEAKING OUT NOW

As business leaders, we are speaking out now because we are concerned that strains and unresolved conflicts within the federation — most notably the threat of Quebec secession — could derail Canada’s otherwise very bright economic and political prospects, and thereby alter the face of Canada in ways that we all would deeply regret. On the economic front, the picture is increasingly positive. Adaptation to global trade liberalization and to technological change is well advanced, inflation is at rock-bottom levels, productivity is rising, exports are booming, interest rates are at their lowest level in a generation, and public deficits are fast disappearing. In all of Canada, job growth is picking up and unemployment rates are falling.

We are ranked by the World Economic Forum as the fourth most competitive economy in the world and by the Economist Intelligence Unit as the third best country in which to do business in the years ahead. Beyond economics, Canadian civil society and quality of life are second to none, the United Nations having listed Canada for the fourth year in a row as the best place in the world to live, and Canada’s citizenship and passport are choice number one among would-be immigrants.

Canada, in short, does work well. This does not mean, however, that any of us can rest on our laurels. Successful companies are engaged constantly in a search for creative ways to improve what they do, because that is the only way to ensure that they continue to grow. Similarly, we believe that Canada’s governments must commit themselves to a relentless evaluation and evolution of their work, to ensure that they can continue to serve the ever-changing needs of all Canadians.

In suggesting ways to address the strains and unresolved conflicts in the federation, we are not proposing another large-scale attempt to change our basic governing structures and to rewrite the Constitution. Canadians from coast to coast are rightly fed up with endless rounds of fruitless talk on that subject. We are proposing instead a powerful expression of political will, and practical steps that will lead to better understanding among citizens across the country and to significant improvements in how Canada works.

AN AFFIRMATION OF THE GREATNESS OF CANADA

We begin by appealing to you and your colleagues to step up your efforts in the affirmation of the greatness of Canada. Part of the Canadian malaise is rooted in a reluctance or even refusal of some leaders and citizens to celebrate what Canada is and what past and current generations of Canadians have accomplished together.

Like so many of our colleagues in the business community, we have had the advantage of travelling extensively throughout Canada and the world — a world in large measure torn by hardship, strife and instability. The benefit of observation and comparison has left no doubt in our minds that of all countries, Canada is the finest. Let’s give strong and unabashed voice to this reality, let’s do it often and let’s do it in every part of the country. And more to the point, let’s challenge the skeptics and denigrators who dare to say that Canada does not work or that Canada is not a real country.

ECONOMIC GROWTH, JOBS AND UNITY

At the BCNI, we have long argued that a healthy economy and a healthy federation go hand in hand. Over the past fifteen years, we have endured a difficult period marked by high levels of joblessness, public debt, inflation, interest rates and taxation. These economic shortcomings and disparities increasingly pitted region against region and citizen against citizen, eating away at the foundations of our country.

Today, as Canadian economic performance moves from strength to strength, the hard edges of economic scarcity are beginning to soften, and it is becoming steadily more difficult for the denigrators of Canada to sound credible or convincing. The message here is crystal clear —  every step on the part of governments in Canada to improve the environment for economic growth and job creation is a step in favour of strengthening the federation. Here, the efforts of the federal government and the provinces certainly have been beneficial. The overall public policy environment in Canada today is increasingly favourable to growth. But continuing efforts are called for, particularly with regard to tackling high levels of public debt and high levels of personal taxation.

GLOBAL STANDING AND GOOD GOVERNMENT

We are the first to acknowledge that a well-functioning federation, respect for the rule of law, efficient machinery of government and a professional and competent public service are all powerful sources of strength for Canada. These advantages are in fact an important reason why Canada’s global standing, both politically and economically, is what it is.

We must not take these strengths for granted. Indeed, we must work much harder at fostering greater respect for our institutions of government and for the people engaged in public service. Good government, though, is not synonymous with large government. Rather, good government that offers real and perceived value to citizens is what we all must strive for.

REBALANCING THE FEDERATION

For close to 20 years, the BCNI has praised the virtues of the Canadian federation. But over this period of time, we have joined voices with many others in calling for improvements to the way we are governed. A focus of our recommendations has been in the area of federal-provincial relations and on the principle of rebalancing responsibilities between the two senior levels of government.

You and your fellow Premiers have joined with the Prime Minister in examining how this can best be achieved. Some progress has been made, notably with the conclusion of intergovernmental agreements to transfer responsibility for manpower training. But much remains to be done, and we are compelled to ask some blunt questions. Where do negotiations stand with regard to the federal government’s offer to vacate specific areas of exclusive provincial jurisdiction and to curtail the unilateral use of the federal spending power in provincial domains? Where do negotiations stand in arriving at new approaches toward the social union, most importantly with regard to health and social services? And what about the economic union? Why is it that the joint federal-provincial commitment to reduce or eliminate internal barriers to the free movement of citizens, goods, services and capital has achieved so little? And just as important, why has the progress made to date not been seized upon by First Ministers and praised widely to show Canadians what can be achieved in this country?

Each Premier and the Premiers collectively have an important say and responsibility in answering these questions. We know that achieving real progress in some of these areas is easier said than done. But we would counsel that the time for a major “push forward” is now. Why not replace more than a quarter century of talk about rebalancing with a concerted drive to settle many of these questions, and to then make sure that Canadians are made aware of and take pride in what has been accomplished?

As a country, we face a range of formidable challenges in the years ahead, and the main government levers for dealing with many of these challenges — in education and training, in health care and in social services — rest within areas of provincial jurisdiction. In grappling with these challenges, our federation must have the flexibility to meet diverse local and regional needs. But we also must ensure that our economic and social union provides a strong framework for concerted action on issues of shared concern.

SHARED VALUES, EQUALITY AND DIVERSITY

We believe that Canadians of all languages and cultural backgrounds share core values that set us apart as a distinct society within North America. It is a society that finds strength by celebrating diversity, that builds strong communities on a foundation of respect and tolerance, and that seeks progress through co-operation and consultation rather than confrontation.

We believe that these values are still strongly held, despite the bitterness and disillusionment left behind by decades of constitutional debate. Many Canadians may now have the impression that well-meaning people have reached an impasse, locked in a struggle between the supposedly irreconcilable concepts of recognition of Quebec’s unique character and recognition of the equality of all provinces. We think this perception is mistaken.

It is a fact that all Canadians share equal rights as citizens. All provinces have the right to equal treatment as partners in the Canadian federation. At the same time, not all provinces share the same problems, priorities and interests. Some provinces have greater desire to exercise powers in some areas than in others in order to respond to the particular aspirations of their constituents. Canada’s federation has been flexible enough to meet these diverse needs in many ways over the course of the years.

It is a fact that French-speaking and English-speaking settlers have shared vital roles in building the diverse country that we share today with aboriginal peoples and with immigrants of many other cultures. It is a fact that while Francophones have been and remain essential partners in creating our national identity, they face an immense challenge in continuing to nurture their language and culture within a predominantly English-speaking North America. And it is a fact that, within its existing powers under the Canadian Constitution, the Government of Quebec has played a lead role in preserving and promoting the French language, culture, and tradition of civil law in the province, both directly and by fostering a range of distinct institutions.

We see no conflict between recognition of the historic and continuing role that French-speaking people have played in helping to build a great country and recognition that the Canadian federation is built upon the principle that all provincial governments have the right to equal treatment and that all Canadians have equal rights as individuals. The fact that the government of Quebec gives a high priority to policies and institutions intended to preserve and promote Francophone culture does not imply that it has exercised or should be granted jurisdictional power that is not or would not be available to all provinces.

In seeking to enhance our federation, we are not responding merely to the demands of one provincial government. Rather, we see in the frustration expressed by Quebecers in the last referendum simply one aspect of a desire shared by other Canadians to make our country work better. We think Canadians care less about political structures than about the effectiveness of their governments in meeting both their common and diverse needs — and in ensuring that prospects for economic growth and job creation are no longer overshadowed by political uncertainty.

PRINCIPLES FOR A MORE EFFECTIVE FEDERATION

We believe that the basic principles that should guide the evolution of our federation are clear:

• Each province is and must remain an equal partner under the law in the Canadian federation. The government of each province has the right, within its jurisdiction, to exercise all powers entrusted to it by the Constitution to meet both the common and diverse needs of its own constituents.
• Canada is and must remain greater than the sum of its parts. In many respects, each government within Canada has a duty not only to its own constituents, but to all citizens.
• The Canadian federation should seek to evolve in ways that provide governments with the flexibility to meet local and regional needs and identities while preserving and enhancing the freedom and security provided by a robust economic and social union. This should be done in a way that is consistent with respect for the constitutional rights of all citizens.
• Where citizens express a desire to receive services through governments, these services should be provided by the level of government that can do so most effectively and efficiently within the framework of the Constitution.
• Where agreements transfer new responsibilities or jurisdictional authority to any provincial government, the same responsibilities and authority should be available to all provinces. At the same time, no provincial government is required to take up and exercise such responsibilities where it sees no need or feels it cannot do so effectively.
• As it has so often and so effectively in the past, reform of government processes and responsibility should proceed wherever possible within Canada’s existing constitutional structures.
• The process of renewal should be visible and accessible to all citizens. Any discussion or negotiation involving a transfer of power or responsibility between governments should be open to public scrutiny and input.

AN APPEAL FOR COLLECTIVE LEADERSHIP

Barely a year ago, the BCNI-sponsored Confederation 2000 Conferences made an urgent appeal to First Ministers to reaffirm that which is strong and enduring about Canada and to move quickly to tackle the problems facing the country. The collective wisdom of those who participated in the conferences was that there was much that could be done to improve the workings of the federation without, for the time being, reopening constitutional negotiations. We agree.

The economic initiatives we have proposed, the major push forward with the rebalancing agenda, the affirmation of the principles of equality of provinces and individuals under the law and the recognition of the unique character of Quebec will benefit from a powerful expression of political will on the part of you and your fellow Premiers — a commitment to collective action.

In selecting these areas for collective action, we do not wish to leave the impression that other changes to the way we are governed are less worthy of attention. The issue of the reform of Canada’s Senate is a notable example. But we are explicitly avoiding recommendations that would require immediate action on the constitutional front as it is clear that conditions for constitutional change do not yet exist. Regrettably, this is attributable in no small part to the absence of a pro-federalist government in Quebec.

What we are recommending therefore to you and your fellow Premiers at this time is modest in form: a simple but strong declaration of your commitment to the urgency of effective renewal. We have been encouraged to offer specific language in support of our recommendations, and attached is one possible expression of such a declaration. We hope that this reflection of our thoughts will be helpful in stimulating a constructive discussion in St. Andrews.

The purpose of such a declaration is not to commit you or any Premiers to specific measures or timetables, but rather to demonstrate unambiguously that our political leaders from coast to coast can reach a consensus on an expression of our shared principles and priorities at this time.

Should you proceed with a declaration following your meeting in St. Andrews, you might also wish to consider a subsequent step  — its endorsement by each of your respective legislatures. This would provide an even more powerful signal of the determination of your governments to move forward expeditiously with constructive reform.

The Premier of Quebec has indicated that neither he nor his government is willing to engage in discussions about the renewal of the federation. Should this stand in your way? In our view, most definitely not. Premier Bouchard has shown in the clearest possible terms his desire to take Quebec out of Canada, and has rejected all overtures for accommodation or reconciliation. But we believe that he and his party do not speak for the majority of Quebecers when it comes to the issue of secession. Indeed, we saw in the number of votes cast for federalist parties in the last federal election a sign that Quebecers, including a majority of Francophones, favour co-operation over confrontation and want Canada to work.

The challenge is clear, and so must be the response. We believe that your efforts and the efforts of all citizens across Canada must be to work with the significant majority of Quebecers, including the Leader of the Opposition in the National Assembly, who wish to build a stronger and better place for Quebec within Canada. It is to them that we must reach out a hand of friendship and co-operation. It is to them that we must say clearly that we share their thirst for change and that we are ready to work in a constructive manner to build a better country.

Premier, we hope that you and your colleagues will construe our words today as an honest effort to bridge some of the solitudes that have come to dominate our political discourse. We know that our words are not perfect, but we trust that our meaning is clear. We believe that we have a duty to help build an even better Canada to pass on to our children, and we turn now to you and your colleagues, as the elected representatives of Canadians, to pass judgment on these suggestions and take action as you see fit.

Sincerely,

The Executive Committee
Business Council on National Issues

A. L. Flood
Chairman

Guy Saint-Pierre
Honorary Chairman

Peter Bentley
Vice-Chairman

Jean Monty
Vice-Chairman

J. Edward Newall
Vice-Chairman

David O’Brien
Vice-Chairman

Thomas d’Aquino
President and Chief Executive